Irda issues fresh micro-insurance draft norms
01 Feb, 2014 03:03 PM
Partial withdrawal allowed under micro-variable life products; kirana stores can sell policies in rural areas.

Insurance Regulatory and Development Authority (Irda) has brought out a revised draft on the micro-insurance products. The regulator has said that partial withdrawals may be permitted subject from the second policy year onwards, subject to ensuring maintenance of minimum balance equivalent to one annual premium in the policy account.

Irda has further said in the draft that an Insurer may enter into a deed of agreement with a person or entity whose micro insurance agency agreement was terminated (other than on the grounds of fraud / misconduct) after the expiry of 3 months from the date of termination of the said agreement. No Insurer will be allowed to re-appoint a Micro Insurance Agent who was terminated on grounds of fraud or misconduct.

In case of termination of a Micro Insurance Agent, the lapsed Micro Insurance policies of the terminated Micro Insurance agent may be allotted to another in force Micro Insurance Agent of the same insurer by obtaining the prior consent of such micro insurance agent. The Micro Insurance agent who is allotted such lapsed Micro Insurance Policies is entitled to remuneration / commission as per the micro insurance product norms.

For distribution of micro-insurance products, Irda has said that regional rural banks, micro-finance institutions, district cooperative banks, non-governmental organisations, self-help groups, urban cooperative banks, banking correspondents and individual owners of kirana stores, public call offices, petrol bunks and fair-price shops in rural areas will be allowed to sell these products.

The regulator has proposed that all micro variable life insurance products shall have a lock-in period of five years from the date of inception of the policy during which period surrenders are not to be allowed, but partial withdrawals may be permitted subject to above reports.

A micro insurance agent may work with One Life Insurance Company and one General Insurance Company. In addition to this a Micro Insurance Agent may also work with Agriculture Insurance Company of India for distributing micro insurance products of Crop Insurance and with any one of the standalone life insurance companies for distribution of their health insurance products.
Source : Business Standard

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